The Norwegian construction industry recorded a CAGR of 8.80% during the review period (2009−2013). Norway’s economy underwent an extended period of insubstantial expansion, due to decelerated growth in the real estate sector and a sharp increase in property prices. This was reflected in the construction industry’s growth, which slowed from 14.0% in 2011 to 9.4% in 2013. This decline was driven by a slump in residential construction and the weakening of the krone, following the European debt crisis. Industry outlook is still favorable, due to the government’s commitment to improving infrastructure. Industry output is expected to record a CAGR of 7.07% over the forecast period (2013−2018).

After recovering from the financial crisis, the Norwegian construction industry recorded a slowdown in 2012. During review period, the gross value-added growth in construction peaked at an annual rate of 12.9% (in nominal terms) in 2012, but activity slowed in 2013, posting a contraction of 9.9% in 2013. This reflected a rapid rise in the cost of construction − especially materials costs. With government commitment and investment picking up, the industry is showing signs of positive growth. The industry’s value add is projected to reach NOK238.0 billion (US$37.8 billion) in 2018, representative of a forecast-period CAGR of 7.77%.

Norway’s GDP grew by 3.5% during 2011–2012; The construction industry’s contribution to GDP increased by 7.4% during the same period. According to Statistics Norway, the industry recorded a solid performance, with turnover increasing by 6.5%, to value NOK149.0 billion (US$25.0 billion) in 2013, compared with 2012. The industry’s total projects grew by 6.0% in the first-quarter of 2014, compared with the last quarter of 2013.

Under the New National Transport plan (2014–2023), a series of infrastructure projects will be launched over the forecast period to develop roads, highways, airports, railways and power supplies, which will ultimately lead to the all-round development and modernization of the country’s infrastructure. The government will invest NOK508.0 billion (US$85.3 billion) on transport for the next 10 years; NOK311.0 billion (US$52.2 billion) will be spent on roads, NOK168.0 billion (US$28.2 billion) on railroads and the remaining on other transport facilities. Key projects under the New National Transport plan are the construction of a highway E18, the upgrade of Oslo’s rail network, the construction of an underground railway tunnel through Oslo, and the construction of road between Kristiansand and Trondheim.

The number of inbound tourists to Norway increased from 4.3 million in 2008 to 5.1 million in 2012. In October 2011, the government planned for the expansion of airport facilities, spanning 17,000m2 area at the Oslo Airport in Norway. The construction works include the construction of a new terminal 2 building, a pier, taxiways, departure and arrival areas, a new baggage handling facility, expansion of the security check point, central building, and 11 new parking areas with bridges, and six new remote parking areas. The expansion project will therefore help to increase the capacity of airport to 28 million passengers by 2017. The leisure and hospitality buildings construction category is expected to progress at an impressive rate, due to the steady rise in the number of travelers in the country.

In a bid to revive the Norwegian property market, the government reduced interest rates on mortgages. The relatively low rates are expected to contribute to an upturn in the demand for residential property. According to Statistics Norway, the central bank has had interest rates on hold since March 2012. An increase in the population and low unemployment rates will help to foster demand in the residential construction market.

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